Global manufacturers remain committed to outsourcing to China despite the recent spate of tainted product recalls, according to survey findings released by the smart cube, a professional services firm specializing in customized market and business research and analyzes.
Seventy-eight percent of global manufacturers surveyed said they are confident that their existing supply chain management procedures are more than adequate while less than 25 percent of respondents had reviewed their supply chain management practices after recent product recalls. Only one in five respondents said they were considering changes to their quality control process.
"Despite the extensive publicity involving lead-tainted products from Chinese facilities, survey findings indicated that manufacturers still perceive China as the preferred destination for outsourcing manufacturing," said Omer Abdullah, managing director of the smart cube. "Despite some expressed concern, most manufacturers regard the recalls as being isolated supplier-specific incidents and not part of a systemic wide problem or trend. China's position as an attractive location for inexpensive labor and raw materials hasn't been diminished and manufacturers don't believe that relocating to other developing countries would guarantee immunity from similar supply chain breakdowns."
Abdullah said manufacturers doing business in China rank the country's perceived lax oversight and enforcement of intellectual property rights as a bigger issue in outsourcing to the country than quality control. "More so than risks to the supply chain, intellectual property protection was the least desirable reason to outsource manufacturing to China," he said.
In addition, less than 20 percent of respondents said that developing more stringent vendor selection processes was a key lesson from the recent product recalls. And only 12 percent of manufacturers said maintaining an on-site presence is a key factor to ensuring quality of outsourced products and preventing product recalls.